Which of the following statements about financial statement analysis is incorrect?
A. Horizontal analysis for several years can be done by choosing one year as a base year and calculating increases or decreases in relation to that year.
B. In horizontal percentage analysis, an item from the financial statements is expressed as a percentage of the same item from a previous year's financial statements.
C. Vertical analysis compares two or more financial statement items within the same time period.
D. The reason behind a financial statement ratio or percentage analysis result is usually self-evident and does not require further study or analysis.
Answer: D
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